Page 167 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 9: Sales Promotion

something to consumers such as missing numbers or letters to complete a certain numbered Notes
digit or product or brand name. A consumer, who does it within the promotion period, wins the
prize.
Exchange or Buy-Back Offers: Some consumer durables once bought are not replaced for a very
long time in India. To encourage such consumers to replace their old products with a new one,
companies or their authorized dealers offer buy-back or exchange offers. The manufacturer or
the dealer pays some reasonable amount for the old product and sells a new one. Often this new
product is offered on convenient interest-free installments.
Point-of-Purchase Displays: In-store presentations and exhibitions of products along with
relevant information fall under this category. The message is clearly "come and get it, we have
it." There is a saying in Hindi "Jo Dikhta Hai Woh Bikta Hai," (whatever is displayed, gets sold).
Producers often supply such displays to retailers. Retailers like to use POP materials if they are
attractive, informative, and capable of having impact. Effective displays stimulate customer
interest, increase store-traffic, and often encourage unplanned purchases.

Example: ITC has launched a sales promotion to boost the sales of its Aashirwad brand
of wheat flour. They are offering a Vivel shampoo worth 15 with every 10Kg pack of Aashirwad
Aata.

Coca Cola has recently cut the price of its Coke Can from 25 to 20
Panasonic is offering an assured gift with every purchase of a Panasonic product during this
diwali.

9.1.2 Trade Promotions

Trade promotions are directed at resellers (distributors, dealers, wholesalers, and retailers).
Trade sales promotions are part of "push" strategy of producers. The objectives of trade sales
promotions are different from consumer promotions. Producers realise the importance of retailer
support. They are in the final contact in distribution chain and can influence customers in more
ways. Consumers sometime seek retailer's suggestions before making a purchase and retailers
in many cases can influence the product choice. The main objectives of trade promotions include:
1. Build strong relations with channel members.

2. To stimulate in-store merchandising support, such as arranging displays, shelf space,
feature advertising etc.
3. Gain distribution of new products.

4. Gain support for existing brands.
5. Manipulate levels of inventory held by wholesalers and retailers.
Trade Allowances: The purpose of trade allowances is to offer financial incentives to resellers in
order to motivate them to make a purchase. A trade allowance can be offered in a variety of
ways:
Buying Allowances: A producer pays a reseller some fixed amount or money or discount for
purchasing a certain minimum quantity of product within the specified period of time. The
payment may be given in the form of a cheque from the producer or a discounted invoice.

Free Goods: Reseller is required to buy a certain number of product cases and for each case
purchased, a certain amount of free quantity of the same product is offered. For example, the
offer might be, "One pack containing one dozen of product free on purchase of 12 packs".

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